A.R.Constructions, Guntur V. The Deputy Commissioner Income Tax, Circle-2(1), , Guntur

ITA 97/VIZ/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9800 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 97 / VIZ /201 8 (ASST. YEAR : 20 1 0 - 11 ) M/S. A.R. CONSTRUCTIONS, D.NO. 7 - 105, NEAR SIVALAYAM, TADEPALLI, GUNTUR. V S . D CIT, CIRCLE - 2 (1), GUNTUR . PAN NO. AALFA 7577 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 02 / 0 4 /201 9 . DATE OF PRONOUNCEMENT : 05 / 0 4 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR , DATED 01 /0 2 /201 8 FOR THE ASSESSMENT YEAR 20 1 0 - 11 . 2. THE ONLY GROUND FOR ADJUDICATION IN THIS APPEAL RELATES TO ADDITION IN RESPECT OF RS. 8.00 LAKHS. 3 . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED TH A T THE ASSESSEE IS EXECUTING CIVIL CONTRACT WORKS. ON VERIFICATION OF THE BOOKS, THE ASSESSEE HA D DEBITED AN AMOUNT OF RS.1,81,21,680/ - TO THE PROFIT & LOSS ACCOUNT UNDER THE HEAD 2 ITA NO. 97/VIZ/2018 ( M/S. A.R. CONSTRUCTIONS ) LABOUR WAGES PAID, WHICH WERE EVIDENCED BY SELF MADE VOUCHERS. THESE ARE NOT AMENABLE FOR VERIFICATION. CONSIDERIN G THE NATURE AND QUANTUM OF EXPENDITURE AND FACTS AND CIRCUMSTA N CES OF THE CASE , IT WAS PROPOSED TO DISALLOW AN AMOUNT OF RS. 8.00 LAKHS , BUT THE ASSESSEE AGREED FOR DISALLOWANCE OF RS. 4.00 LAKHS ONLY. THOUGH, TH E ASSESSEE HAD NOT ACCEPTED PROPOSED DISALLOWANCE, THE ASSESSING OFFICER FELT THAT DISALLOWANCE OF RS. 8.00 LAKHS ON THE EXPENDITURE DEBITED IS REASONABLE. HENCE, AN AMOUNT OF RS.8.00 LAKHS IS DISALLOWED AND ADDED TO THE INCOME RETURNED. 4 . ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE A . O. 5. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THIS TRIBUNAL. 6 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 7 . IN THIS CASE ASSES SEE IS EXECUTING CIVIL CONTRACT WORKS AND HE MADE CERTAIN PAYMENTS TO THE LABOUR , WHICH IS EVIDENCED BY SELF MADE VOUCHERS. ACCORDING TO THE ASSESSING OFFICER, THOSE VOUCHERS ARE NOT AMENABLE FOR VERIFICATION AND PROPOSED FOR DISALLOWANCE OF RS. 8.00 LAKHS, BUT ASSESSEE HAS ACCEPTED FOR RS.4.00 LAKHS . HOWEVER, THE ASSESSING OFFICER NOT AGREED WITH THE ASSESSEE AND MADE THE ADDITION OF RS. 8.00 LAKHS. BEFORE US, LD.COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT DISALLOWANCE OF 3 ITA NO. 97/VIZ/2018 ( M/S. A.R. CONSTRUCTIONS ) RS.8.00 LAKHS IS AN EXCESSI VE, THEREFORE HE PRAYED THAT DISALLOWANCE TO THE EXTENT OF RS. 4.00 LAKHS IS REASONABLE AND JUSTIFIABLE. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS. 8.00 LAKHS IS HIGHLY EXCESSIVE. IN OUR OPINION, IN THE INTEREST OF JUSTICE, WE RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS. 4.00 LAKHS. ORDERED ACCORDINGLY. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 5 T H DAY OF APRIL , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 5 T H APRIL , 201 9 . VR/ - COPY TO: 1. THE ASSESSE E - M/S. A.R. CONSTRUCTIONS, D.NO. 7 - 105, NEAR SIVALAYAM, TADEPALLI, GUNTUR. 2. THE REVENUE DCIT, CIRCLE - 2(1), GUNTUR. 3. THE PR. CIT , GUNTUR. 4. THE CIT(A) - 1, GUNTUR. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.